House GOP Pushes to End Estate Taxes

Published 8:00 pm, Tuesday, June 17, 2003

House Republicans, fresh from winning a $330 billion tax cut on wages and investment income, pushed Wednesday to eliminate estate taxes by the end of the decade.

"It's time for the death tax to die," said Rep. Christopher Cox, R-Calif.

The bill debated Wednesday would permanently abolish taxes on inherited estates and would reduce revenue by $162 billion through 2013. A law passed in 2001 eliminates the tax in 2010, only to resurrect it a year later, a quirk forced by Senate rules designed to prevent lawmakers from deepening budget deficits.

A nearly identical bill that passed last year died in the Senate. House Republicans said the odds that the bill will become law have improved this year with the GOP in control of both houses of Congress and the White House.

Sen. Jon Kyl, R-Ariz., said Senate sentiment is turning toward eliminating the tax. "The opponents are now desperately pleading with us to make some kind of a deal, some kind of a bargain. That is a very good sign as far as I'm concerned," he said.

Republicans pushing to eliminate the tax said it falls most heavily on families that inherit small businesses and farms, forcing them to liquidate the businesses to pay the taxes.

"People have a right to leave their earthly possessions to their children, and we are affirming that right," said House Majority Leader Tom DeLay, R-Texas.

Democrats won an opportunity to offer an alternative solution that eliminates the tax on more than 99 percent of estates by allowing individuals to exempt $3 million from estate taxes and married couples to exempt $6 million beginning next year.

Rep. Earl Pomeroy, D-N.D., said his approach would retain the tax for the country's wealthiest families.

"I am sick and tired of hearing that this is a bill about family farmers, small business owners, those with accelerating property values," he said. "The reality is the bill that the majority will bring to the floor this week is about the most affluent few in the country, paid for by everybody else."

IRS statistics show that in 1999, just over 49,000 estates paid $119 billion in taxes. In 2003, $1 million of an estate is exempt from taxes of up to 49 percent.

The vote comes as President Bush tours the country on a two-week push to raise millions for re-election while also promoting the tax cuts passed under his watch. Republicans pointed to a revitalized stock market as proof that their policies will pull the country into economic recovery.

Small businesses allied with each side divided over whether repealing the estate tax will support stronger economic growth.

Jerry Pierce, owner of Restaurant Equipment World in Orlando, Fla., said the tax harms workers who are laid off when small businesses shrink or close under the weight of their tax bills.

Seth Goldman, president of Honest Tea in Bethesda, Md., said eliminating the estate tax will create "an entitled class" and suppress entrepreneurship.

"There are those who claim that an estate tax is un-American, but I believe that the idea of an inherited upper-class is un-American," he said.